According to the minutes, rate rises – or speculation of – in many other developed countries will have little to no influence on domestic interest rates, and local economic data provides little impetus to increase rates any time soon.
While pointing to a pick-up in GDP figures in the June quarter and an overall brighter outlook for the Australian economy, the board notes that wage growth remains slow and that one of the main reasons to raise rates – soaring house prices – has begun to show some moderation, particularly in the once-booming Sydney market.
However, the biggest driver of interest rate policy in the short term is the Australian dollar.
“The appreciation of the Australian dollar since mid-2017, partly reflecting a lower US dollar, was expected to contribute to ongoing subdued price pressures,” the minutes read.
“A material further appreciation of the exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast.”
The RBA left interest rates on hold at 1.5 per cent at its October meeting. The last movement in either direction was the 25 basis point cut handed down in August last year.